Alabama teachers: How does compensation stack up?

The fight to give Alabama public school teachers a pay raise was one of the most controversial issues the state took on during the 2014 Legislative session.

Deciding whether to give a cost-of-living raise, fully fund health insurance or do both led to long filibusters, disagreements between the two legislative chambers, a division within the Republican party, veto threats from the governor and delays in finalizing the education budget.

In the end, fully funding health insurance won. At least for now.

Public school teachers won't see an increase in their portion of health insurance costs, but they won't see a cost-of-living raise either.

Every year, some argue Alabama teachers aren't paid enough, while others say the health benefits and pension plans make teachers far better off than private-sector workers.

But how does teacher compensation in Alabama compare to other workers in the state and other teachers in the nation?

The average pay for Alabama teachers in 2012-13 was $47,949, compared to about $42,890 for state employees and $40,240 for all Alabama workers.

Teacher compensation varies from state to state and district to district. It's also not cut-and-dry or easily comparable to other districts when health benefits, retirement benefits and the cost of living are taken into consideration.

"You always have to draw the distinction between salary and total compensation," said Bill Slotnik, executive director of the Boston-based nonprofit Community Training and Assistance Center, which is used by school districts all over the country to improve teacher compensation models.

Benefits

The average cost to a single Alabama teacher for health insurance is $15 per month, or about $180 per year. According to data from the Kaiser Family Foundation, the average cost of an employer-based health plan for a single employee in Alabama is about $103 per month, or $1,233 per year.

Single Alabama state employees pay about $90 per month ($1,080 a year) and $280 per month for a family. Those prices, however, are discounted by $50 if the employee is a non-smoker and an additional $25 if they participate in a wellness program, meaning some would pay only $15 per month, or $180 a year.

The average cost of a health plan for a single Alabama worker is $4,700 per year, according to Kaiser data. For teachers, that cost is similar at $4,961, meaning the state takes on far more of the cost compared to what a private-sector employers would pay.

To cover a family, a teacher would pay $177 per month, or $2,124 per year for a plan that costs nearly $12,000. The average cost in Alabama is $350 for a family or $229 for a plan that would only cover a spouse.

Under their health plan, Alabama teachers have a $30 co-pay for an office visit, $6 for a generic prescription drugs and $200 for an inpatient hospital stay, according to Diane Scott, chief financial officer of Public Education Employees Health Insurance, which oversees the teachers' health benefits.

Amy Marlowe, spokeswoman for the Alabama Education Association (AEA), said the insurance teachers have is a good plan, but people talk about it like it's a "Cadillac" program without looking at the history of whether teachers got raises or not.

"Educators have given up pay raises in past years in order to have a quality program that's financially sound," she said. "We're very fortunate to have it. But it hasn't come without sacrifice."

Salaries

Unlike most states, Alabama has a statewide pay schedule for its teachers. Some districts pay more, if they choose to, but the base pay the state allocates for each teacher is based on level of education and years of service.

An Alabama teacher with fewer than three years of experience and a bachelor's degree made $36,867 this year – the lowest pay on the salary schedule. A teacher with a doctorate who has more than 27 years of experience made $62,040 — the highest pay on the schedule.

There are 21 out of 167 districts that pay — at some levels — above these required salary schedules.

Teachers got a 2 percent raise for the current 2013-14 school year, and a 7 percent raise in 2007-08. But some say the most recent raise simply offset the additional money teachers were required to pay into the retirement system.

Prior to 2011-12, teachers were required to pay in 5 percent of their salary, but that figure went up to 7.5 percent in 2012-13, said Norris Green, director of the state's Legislative Fiscal Office. The state's portion is 11.08 percent and 11.71 percent, depending on when the teacher was hired.

Marlowe said data shows that the average teacher in Alabama is a female with a master's degree and 11 years of experience. The salary for someone who fits that profile is $49,329.

Marlowe said the state had started making progress on increasing teacher pay until the economic downturn about six years ago. And now, as other states and districts start to make up for years without raises, Alabama isn't doing that, she said.

"The heartbreaking thing is that the money is there," Marlowe said. "It's just what (the legislators) choose as their priorities."

Alabama teacher salaries ranked 39th in the country in average salary, according to data from the National Education Association. The average salary for an Alabama teacher in 2012-13, which was $47,949, is about $8,000 less than the $56,107 national average.

But the ranking doesn't take into consideration health insurance, pension plans or other types of compensation.

Data from the National Center for Education Statistics (NCES), the research arm of the U.S. Department of Education, shows that when inflation is taken into account, the average salary for Alabama teachers has gone down 4.4 percent over 13 years, from the 1999-2000 school year to the 2012-13 school year.

Although the salary schedule hasn't been decreased in recent years in Alabama, the number of teachers at different levels of experience and with different education credentials can affect the average salary in a state.

Nationally, the average teacher's salary has gone down about 1.3 percent, according to NCES data. There are 10 other states with an average salary that has gone down as much or more than in Alabama, 14 states that have had a slight decrease and 24 states that have had an increase.

National trends

Slotnik said it's not a trend to see average teacher salaries go down. But he said even if a state's average doesn't appear to be going down on paper, the money still has to come from somewhere. One of the most common ways districts balance budgets is by increasing class sizes, he said.

"If you're trying to attract and retain a high quality teaching workforce, having decreases year to year is not good," Slotnik said. "Over the last half-dozen years, there's been such a strain on public sector budgets."

Bringing in younger teachers creates a dynamic, typically, where you have the least experienced teachers working with those who have the greatest level of need. Younger teachers cost less, but the turnover is much higher.

Slotnik said for every eight teachers who come into a system, the likelihood is that within four years, four will have left the district.

The Alabama Department of Education didn't have the exact number of teachers employed at each salary level readily available, but data from the Department of Finance for 2014-15 shows how much money is allocated by the state for teachers at each salary level.

Districts may hire more teachers with funding from other sources, or have fewer teachers if it chooses to use the money for something else. According to the data, there are more than 4,200 positions — more than at any other level — at the lowest level of pay, which is a bachelor's degree with fewer than three years of experience.

Close behind were teachers with six to nine years of experience and master's degree and teachers with 15 to 18 years of experience and master's degree. They earn $48,675 and $51,371, respectively.

Douglas Rose, an education finance consultant based in Massachusetts, said average salaries generally go up during a recession because people tend not to leave their jobs. Most states require collective bargaining for teachers, so if there are any step increases to be had, they lose the younger, cheaper teachers.

"The tendency is for it to go up even though you haven't changed your salary system," Rose said.

Rose said teacher compensation is a recurring fight that goes on every year in every state.

"The recession put a big dent on the teacher side of it. Salaries were dropped or certainly at least frozen," he said. "Benefits were not paid into, and there are all these other money-saving gimmicks as you go through (a recession)."

Teachers are generally demoralized and disorganized during recessions, Rose said. It's taken a while, but in many districts, things are starting to improve for teachers, he said.

Retirement

Another benefit Alabama teachers have is a fixed retirement system, which many private employers no longer offer.

Alabama teachers, much like state employees, have a defined benefit program through the Retirement System of Alabama, meaning they are guaranteed a certain amount of money in the form of a pension at retirement.

Janice Charlesworth, executive secretary of the Alabama Education Retirees Association, said teachers who were hired before 2013 and have worked in the system for 10 years can take their pension at age 60, or at any age after they've worked 25 years.

When they reach 25 years, they're eligible for a pension based on the number of years they worked and the average salary of the last three years worked. Those hired after 2013 won't be eligible for a pension until they have served 10 years and reach age 62.

That means that those who start jobs early in their 20s can retire in their 40s. Many begin collecting pensions while starting second careers. According to a 2014 Gallup poll, the average age of retirement in the United States is 62.

Charlesworth said it's common for Alabama teachers who live near the borders of other states to retire after 25 years and start a second career as a teacher in Georgia, Mississippi, Florida or Tennessee. She said all the surrounding states have defined benefit plans, so a teacher could retire at 48, work 10 years in another state and collect another pension.

Charlesworth, however, said retired teachers haven't seen a cost-of-living increase since 2006, so they're living on less. Out-of-pocket health costs have gone up, but they are grateful that PEEHIP was fully funded this year, she said.

Retired Alabama teachers have similar benefits to active teachers, but their pay scale slides based on the retiree's situation and the number of years they worked, Scott said.

A retired teacher who worked exactly 25 years and is not Medicare eligible will pay about $151 per month if they're single and $10 per month if the person is Medicare eligible. The prices go up from there depending on whether the retiree has dependents or a spouse, Scott said.

A single state retiree not yet eligible for Medicare would pay $276 per month, while an eligible retiree would pay about $50.

"What the draw (for teaching) is you get a pension, good health insurance and stability," Charlesworth said.

Average teacher salaries by state and percent of national average

State

Average salaries

Percent ofnational average

New York

75,279

134.2

Masshachusetts

72,334

129.9

District ofColumbia

70,906

126.4

Connecticut

69,397

123.7

California

69,324

123.6

New Jersey

68,797

122.6

Alaska

65,468

116.7

Maryland

64,248

114.5

Rhode Island

63,474

113.1

Pennsylvania

63,030

112.3

Michigan

61,560

109.7

Delaware

59,679

106.4

Illinois

59,113

105.4

Oregon

57,612

102.7

Wyoming

56,775

101.2

Ohio

56,307

100.4

Minnesota

56,268

100.3

Nevada

55,957

99.7

New Hampshire

55,559

99.1

Hawaii

54,300

96.8

Wisconsin

53,797

95.9

Georgia

52,880

94.2

Vermont

52,526

93.6

Washington

52,234

93.1

Louisiana

51,381

91.6

Iowa

50,946

90.8

Kentucky

50,203

89.5

Arizona

49,885

88.9

Colorado

49,844

88.8

Idaho

49,734

88.6

Indiana

49,663

88.5

Utah

49,393

88

Nebraska

48,997

87.3

Texas

48,819

87

Virginia

48,670

86.7

South Carolina

48,375

86.2

Montana

48,200

85.9

Maine

48,119

85.8

Alabama

47,949

85.5

Tennessee

47,563

84.8

Missouri

47,517

84.7

Kansas

47,464

84.6

North Dakota

47,344

84.4

Arkansas

46,631

83.1

Florida

46,598

83.1

North Carolina

45,938

81.9

New Mexico

45,453

81

West Virginia

45,453

81

Oklahoma

44,373

79.1

Mississippi

41,814

74.5

South Dakota

39,018

69.5

United States

56,107

100

Source: National Education Association Rankings and Estimates, December 2013